Common Trends and Cycles and the Structure of Florida's Economy

Florida, like the rest of the nation, has undergone many economic changes in recent decades, including the decline of the manufacturing base and the growth of international trade. In Florida tourism s growing importance has also figured significantly. In addition to changes at the state level, Florida's cities have become less similar over time.

The author of this article uses multiple cointegration and common cycles analysis to study the interrelationships of labor markets in six Florida MSAs over the past quarter-century. He finds a long-run comovement in these labor markets but also that earlier, close relationships have changed as the economic structures of the MSAs have evolved.

This analysis helps underline the increasing diversity of influences on the growth trends of Florida MSAs. It also suggests that these MSAs react differently to short-run shocks. Both of these dynamics are important in gauging the differing effects of policy or economic shocks on the state in parts and as a whole.